TV counts down to Christmas amid New Year ad spend slowdown fears

In the hit TV series FlashForward everyone in the world loses consciousness for two minutes and 17 seconds. During the blackout, millions glimpse the future. And after probably the most traumatic year in recent broadcasting history, most of the UK's commercial TV bosses must be hoping that their darkness is about to end in a brave new dawn.

Having lived through 18 months of the most dismal advertising performance, broadcasters are set for a bumper end to the year. Some executives forecast that the revival could mark a significant turn in the market.

Though television advertising is expected to be down more than 12 per cent this year to £2.8 billion, advertising buying agency Group M reckons that the UK could be the first country in Europe to come out of the advertising recession next year. It predicts a rise in all UK advertising spending of 0.1 per cent next year, against continued falls elsewhere on the Continent.

Bright lights: ITV's The X Factor has taken £100m in advertising during the current run - but elsewhere ad revenues are slowing dramatically

ITV has had a punishing year as its fumbling for a new chairman and chief executive made it a corporate laughing stock.

It is set to see advertising revenue rise four per cent this month compared with December last year - its first positive comparison for 18 months - and ITV will outperform the overall television advertising market.

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Rupert Howell, ITV's managing director for brand and commercial, said: 'The advertising recession in 2009 has been brutal. In the past three months, we have seen glimmers of stability, but we are still cautious about 2010 and plan for it to be tough.'

At Channel 4, the State-owned, but commercially funded broadcaster, revenue has picked up. It was 16.5 per cent down in September on the same month a year ago but is expected to be up by 8.4 per cent in December on the back of popular shows such as The Queen and River Cottage.

Even Five, which axed a quarter of its staff and slashed its programming budget, can draw some comfort this month. Revenue will be down nearly ten per cent on December 2008, but that is better than September's 28 per cent fall.

'US dramas such as FlashForward have been doing well,' said a Five spokeswoman. 'The supermarkets and M&S have been strong advertisers and they are throwing everything at Christmas.'

Car advertising has been up as well, contributing to the startling figures released last week showing that car sales are up more than 57 per cent in November on the same month last year.

A spokesman for Channel 4 said: 'We're seeing a lot of activity from the retail sector and the motor industry, as well as the alcohol industry.

'In addition, computer games and electronics are also very active, as are television manufacturers in advance of the digital switch.'

And Sky - which earns only six per cent of its income from advertising, with the rest coming from its formidably resilient subscription base - has gained. Advertising is up nearly 17 per cent this month on December 2008, after being down more than four per cent in September.

ITV's phenomenally successful talent show The X Factor, which draws audiences of 16.5 million on a Saturday night, has taken £100 million in advertising since the series began in the autumn.

ITV charges a staggering £250,000 for a 30-second slot during the show. There has been knock-on effect for other stations as advertisers seek alternatives.

But even The X Factor has not been enough to boost ITV's advertising sales above last year's levels. And what will happen when Simon Cowell and his crew eventually quit our screens? TV bosses worry that the underlying reasons for the recent improvement are not as positive as they seem.

Though demand has started to return, many advertisers are managing to bag a bargain.

In a more stable economic environment, clients that withhold spending and buy advertising late end up being punished by paying a higher price for it. But low demand and plentiful supply mean that this is not the case.

The advance-booking 'deadline' is six weeks before a programme is aired. Usually about 90 per cent of advertising has been booked by then. In every month this year, that has been down to 75 per cent.

Advertising on ITV1 and Channel 4 is also cheaper because of competition from the plethora of digital channels.

TV bosses reckon that there is more pent-up demand in the run-up to Christmas - particularly with VAT going back up from 15 per cent to 17.5 per cent on January 1 - and they fear a dip in advertising revenue after the festive season, even though monthly comparisons with 2009 will make the figures look good since the start of this year was so dreadful.

And there is always the World Cup in the summer, which is otherwise usually the weakest of seasons for broadcasters.

This time the matches will be on at a reasonable time and England might, just might, enjoy some prolonged success.